1st Constitution Bancorp (NJ) (FCCY) & First Republic Bank (FRC) Critical Review

1st Constitution Bancorp (NJ) (NASDAQ: FCCY) and First Republic Bank (NYSE:FRC) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Dividends

1st Constitution Bancorp (NJ) pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. First Republic Bank pays an annual dividend of $0.68 per share and has a dividend yield of 0.7%. 1st Constitution Bancorp (NJ) pays out 19.2% of its earnings in the form of a dividend. First Republic Bank pays out 16.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 1st Constitution Bancorp (NJ) has raised its dividend for 4 consecutive years. 1st Constitution Bancorp (NJ) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

1st Constitution Bancorp (NJ) has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, First Republic Bank has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares 1st Constitution Bancorp (NJ) and First Republic Bank’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
1st Constitution Bancorp (NJ) $43.99 million 3.39 $8.39 million $1.04 17.79
First Republic Bank $2.34 billion 6.81 $646.80 million $4.10 24.62

First Republic Bank has higher revenue and earnings than 1st Constitution Bancorp (NJ). 1st Constitution Bancorp (NJ) is trading at a lower price-to-earnings ratio than First Republic Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 1st Constitution Bancorp (NJ) and First Republic Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
1st Constitution Bancorp (NJ) 17.32% 8.13% 0.83%
First Republic Bank 27.37% 12.16% 0.96%

Insider & Institutional Ownership

27.1% of 1st Constitution Bancorp (NJ) shares are owned by institutional investors. Comparatively, 97.7% of First Republic Bank shares are owned by institutional investors. 20.0% of 1st Constitution Bancorp (NJ) shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for 1st Constitution Bancorp (NJ) and First Republic Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
1st Constitution Bancorp (NJ) 0 1 0 0 2.00
First Republic Bank 0 8 5 0 2.38

1st Constitution Bancorp (NJ) currently has a consensus target price of $18.00, suggesting a potential downside of 2.70%. First Republic Bank has a consensus target price of $104.50, suggesting a potential upside of 3.53%. Given First Republic Bank’s stronger consensus rating and higher possible upside, analysts clearly believe First Republic Bank is more favorable than 1st Constitution Bancorp (NJ).

Summary

First Republic Bank beats 1st Constitution Bancorp (NJ) on 14 of the 17 factors compared between the two stocks.

About 1st Constitution Bancorp (NJ)

1st Constitution Bancorp is the bank holding company for 1st Constitution Bank (the Bank). The Bank is a commercial bank, which is engaged in the business of commercial and retail banking. The Company operates through the Community Banking segment. The Community Banking segment consists of construction, commercial, retail and mortgage banking operations. As a community bank, the Bank offers a range of services (including demand, savings and time deposits and commercial and consumer/installment loans) to individuals, small businesses and not-for-profit organizations principally in the Fort Lee area of Bergen County and in Middlesex, Mercer, Somerset and Monmouth Counties of New Jersey. The Bank’s Mortgage Warehouse Funding Group offers revolving lines of credit that are available to licensed mortgage banking companies (the Warehouse Line of Credit). The Bank’s investment activities are classified as available for sale and held to maturity securities.

About First Republic Bank

First Republic Bank is a commercial bank and trust company. The Bank specializes in providing services, including private banking, private business banking, real estate lending and wealth management services, including trust and custody services, to clients in selected metropolitan areas in the United States. It operates through two segments: Commercial Banking and Wealth Management. The Commercial Banking segment is engaged in attracting funds from the public; originating loans, primarily real estate secured mortgage loans, and investing in investment securities. The Wealth Management segment consists of First Republic Investment Management, Inc.; its money market mutual fund activities through third-party providers and the brokerage activities of First Republic Securities Company, LLC; First Republic Trust Company and First Republic Trust Company of Delaware LLC (the Trust Company), and its foreign exchange activities. It offers a range of internally managed investment services.

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